Get Ready for a Flood of EV Sales in Quebec, Canada

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What do companies want from government policy? They want consistency and predictability. Whether policies are more supportive or less, consistency and predictability allow a company to plan things out. They allow a company to more easily forecast consumer demand as well as company expenditures.

It’s easy to get excited about subsidies for something seen as good and worthy of societal support. But it’s also clear, or implied, that those subsidies won’t last forever. The problem is when there are big and unexpected booms and busts, especially that bust part. Companies can build up their demand and operations leaning on the subsidies, but then have a real struggle if the subsidies are suddenly removed.

We’ll see what happens, but this is essentially the challenge of the coming year in the Quebec province of Canada. The “California of Canada” has had strong consumer subsidies for EVs — up to $7,000 for a new BEV, up to $5,000 for a new PHEV, or up to $3,500 for a used BEV. Next year, those figures drop almost in half, a relatively sudden change recently announced. A new BEV will qualify for a $4,000 subsidy, while a new PHEV will qualify for $2,000. In 2026, those figures change to $2,000 and $1,000. Then, in 2027, they’re completely gone.

“The phaseout of these incentives could prove a market test for EVs. A survey from Quebec-based news outlet, Le Journal-TVA Nouvelles (via Le Journal de Montreal) found that one in four Quebecers who planned to buy an EV would no longer do so without an incentive. Just 6% of survey respondents said they would move forward with plans to buy an EV, while 34% said they would reconsider, and 20% said they would look at less-expensive models,” Green Car Reports writes. “The incentive was expected to be cut to $1,000 at some point, but this sudden transition is unexpected and may affect EV affordability in the short term, Canadian publication Electric Autonomy notes.”

Unless something changes in order to preserve and extend these EV subsidies, we can expect quite a volatile year or three for electric car sales in Quebec, and Canada more broadly. As part of that, I expect a big boom in EV sales this year. Consumers will know the subsidy is going away, and automakers will likely work hard to prioritize deliveries to this market in order to satisfy customers. Stay tuned.